Who Will Be Next Fed Chair?: In The Loop (08/05)

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Aug. 5 (Bloomberg) -- On today's "In The Loop," Betty Liu takes you from the day's breaking headlines straight through to the opening bell, speaking with the most influential guests and asking the smartest questions. It's not noise, it's news. (Source: Bloomberg)

Fed up.

The white house lack of reserve when it comes to the great fed care debate.

Gary shilling ways in.

Extra come extra.

Billionaire boston red sox owner takes on another turn around.

Can he revive the boston globe?

And, hollywood verses on wall street.

Why george clooney is fasting dan loeb over his critique of sony.

From bloomberg world headquarters in new york, this is in the loop with betty liu.

Morning, monday, august 5. you are "in the loop" and i'm betty liu.

Julianna goldman watching president barack obama's handling of the race to the fed seat.

The decision could be moments away.

Michael mckee just got back from a fishing trip with dozens of economists.

We will bring up the real deal on why they're so pessimistic and what they think about the fed.

We will talk to bloomberg do columnists of carry a shilling to get his take on the next bed chair and when he believes the fed will taper off the asset- buying program.

In search of the next federal reserve chairman has become public and political in an unprecedented and unusual way.

Lawmakers and newspaper editorials are taking sides on who they wanted a seat.

The president has waited as well.

Defending larry summers.

White house correspondent, julianna goldman, joins us.

The white house wants to diffuse the escalation.

Is it too late?

We will have to see.

We have come to expect this political intrigues, this kind of trauma when it comes to supreme court appointments but not the fed chairman.

The president himself contributed to this.

You can trace it back to his june interview with charlie rose when he was asked to reappoint ben bernanke.

He has already stayed a lot longer than he wanted or was supposed to.

But if he wanted to reappoint him, you would?

He has been an outstanding partner, along with the white house, in helping us recover much stronger than our european partners.

From what could have been an economic crisis epic proportions.

There you go.

That indicated the president would not be reappointed ben bernanke.

That set off a flurry.

Then you had in july with the president gave an interview, he said he wanted a fed chair who understood the dual mandate to promote maximum employment and price stability.

Some people who have been watching this closely interpreted that as an endorsement of larry summers.

Speculation over larry summers sent yellen backers coming to her support.

The white house has been trying to put out the fire.

They said there is no appointment until the fall, weeks away.

At the meeting last week with lawmakers on capitol hill, the president said he was throwing at donald: -- donald cohen's name into the mix.

This puts of magnifying glass on the decision making and has led some former economic officials thinking the white house underestimated how close international and domestic financial markets were going to watch the pick.

It is surprising there were so parsed -- surprise that this would affect the market.

And the louder it becomes, it probably hurts larry summers the most.

The more criticism, it could bolster the case for turning the confirmation hearings into a referendum of the president's economic policy, particularly at the height of the crisis when larry summers was by his side.

If he is the pick and confirmed, it could make it harder for him to get immediate status and respect the fed chairman deserves.

I kept thinking back to 2007 in iowa at iowa state fair.

The president was a senator then.

I asked him a question about the fed and refuse to answer it.

He said he did not want to weigh in because of the independence.

You think back to that and what is going on now.

He should have heeded that advice from the can it get barack obama.

Too late now.

Think you.

Michael mckee has also been talking to influential economists and investors and has the real deal on what they think about who should lead the fed after ben bernanke.

You were on a fishing trip with them.

Was this just an excuse to go fishing?

To go the annual gathering in maine.

Gathering for discussions about the markets and a little fishing.

This does tell you something, these are people who still notes janet yellen, larry summers.

Both get a lot of respect for knowledge and ability, but janet yellen overwhelmingly gets they're not.

-- nod.

More likely to limit volatility, particularly when it is time to taper.

That coming out as soon as many may think.

72 percent say tapering will not start until the december fed meeting or later.

29 percent say it will be 2014. the results may have been influenced by the july payroll report.

Unemployment barely below 7%. gdp barely higher than now.

Bond yields marginally higher.

It does tell you something about what people who have to forecast this stuff for a living think and they do think the white house has messed up the whole process.

White on the july jobs report, what was the reaction?

-- like on the july to a lot jobs report.

They tend to miss that.

Here is what really bothered them, and there was a lot of talk about this, and that was the drop in earnings.

Earnings were growing 3-4 times per year.

You cannot spend what you do not have.

The economy cannot get going until people spend in people cannot spend until they make more.

That is what really concerned people.

Thank you.

Joining me now is economist and bloomberg view columnist gary shilling.

You weigh in on all of this.

Who do you think should succeed ben bernanke?

I think it will probably begin in yellen.

The president has enough problems right now.

A very weak jobs report.

The irs problems to deal with.

I think he would like to have continuity.

The second reason is she is a woman.

I think he would like to be the first president to appoint a woman as head of the reserve.

Larry summers has problems with women's issues.

Got fired at harvard because of this.

Before all of this, it seemed to be he was leaning in a way towards summers and has had to defend the comments he has made about larry summers.

I think part of that is posturing because he does not want to give a clear indication the is made a decision.

There is a certain amount of mystery in this.

I suspect there is a little bit but of drama in the whole thing.

Is this going to be ben bernanke 2.0? you never know.

These people all have a certain amount of independence.

She is not a clone.

I think her actions suggest she would be on the soft side of continuing quantitative easing along rather than shorter.

Of course, the jobs report -- about half the people being hired are in fast food in hospitality's and so on.

If you look at people working in restaurants and related areas, they make about 1/3 per week on a weekly basis of what's manufacturing did.

If you look at hourly wages, about half.

The quality of the jobs are getting worse, even if we see the jobless rates fall down.

That is right.

You look at the economy and say consumers are about the only game in town and how can they continue to spend without reducing the savings rate?

Haven't you criticize ben bernanke's too easy monetary policy?

I do not think it is doing a lot of good and think there is a lot of unintended consequences.

Lower interest rates have encouraged people to go into the zeal for yield.

Junk bonds, emerging market debt.

Of course it has made life very difficult for banks because it reduces the spreads for lending.

Look at insurance companies and pension funds that live on interest income.

To go but it is ok?

I think it is probably going to taper off here at some point.

The tapering got a huge play back in june.

The press conference by ben bernanke.

Everyone said it is over in the virtual collapse of almost everything ever night.

There's been so much concentration on the fed and only the fed.

They are 100% focus on the fed.

I think they will probably do that gradually.

Realistically people were talking about tapering as soon as september, next month.

Given what we saw friday, when do you see tapering?

Probably later than that.

The markets are anticipating at this point whether september or month or two later, i am not sure it would make a lot of difference to the markets.

They have to get rid of two trillion dollars in excess reserves.

Tapering means they are adding to it at a slower and slower rate.

When the economy resumes after do leverage is over, at some point those excess reserves would turn into loans and excess credits in the economy and would push it past full employment and to inflation.

They have a problem out there to deal with.

Are investors wrong to assume o'leary charmers -- summers will be worse for the market?

I think that is a big unknown.

Summers is a very bright guy.

He has his own ideas.

I would not want to handicap what he is likely to do.

Ben bernanke has set a much more collegial fed.

In other words, he is an academic and has encouraged free discussion and even dissent.

That is an atmosphere that would be difficult for a new chairman to come in and completely negate.

That means it is not just the chairman, the other members of the board.

The 12 district bank presidents.

They'll have say.

They'll have a say.

They will have to work together eventually.

We focus on the chairman, because the idea is we want one name to focus on.

The point is, i think the whole structure has a lot more input now than it did earlier.

Thank you for stopping by this monday morning.

Gary shilling, but burtonloomberg "view" columnist.

Media executives have stayed tight-lipped.

Jim dolan may ditch the television business altogether.

Details next.

Supermarket sweeps.

The biggest company of never heard of.

We have uncovered yet another hit in billionaire in their grocery business in new hampshire.

Plus, the drink of choice for golfers?

--stay "in the loop." ? moving and shaking this hour, jim dolan.

He says he may ditch the television business altogether and focus only on broadband.

Predicting the entire transmission of tv will move to the internet.

The first cable c.e.o. to publicly acknowledge such as seismic shift.

If he is right, cable operators will charge only for broadband.

In an interview he said young people will continue to watch on-line video rather than pay for traditional tv.

Even his own kids are big fans, watching it through broadband.

He has already been investing heavily in the company's network connectivity and overhauling operations to improve efficiencies and broadband.

Fans of dexter in for a rude awakening last night.

Showtime continue to be blacked out.

Joining us to talk more about the heated war over transmission fees is our bloomberg news reporter who covers all things media.

If you were here in new york, you could not help but be bombarded with advertisements coming out from cbs and showtime saying he will not get any of your favorite shows.

There day into this fight.

How much longer are we talking about?

Last year directv had a dispute like this where direct tv pull them off the air for 10 days.

A few days before news corp.

Pulled blocks off the air.

The first major broadcast to go off the air.

That lasted about two weeks.

That is the range we're dealing with.

There is a mythical endpoint.

That may be when the nfl season starts.

Cbs has nfl football games.

Very highly-rated.

The type of people that would cancel time warner cable if they still were broadcasting cbs shows.

Right now is really sort of a good time.

Almost a month of way.

Almost a little bit of wiggle room to get a deal done.

Cbs does have very popular shows on the air.

"under the dome "a summer series that has gotten very good ratings.

Tiger woods won the tournament yesterday.

That aired on cbs.

And yet, the summertime is a decent time to do battle because time warner cable probably thinks they will limit the turn away to competitors.

Break down for us where the fight is.

How much is time warner cable or cbs asking for?

Right now time warner cable is the yen they want a dollar per subscriber per month.

For everyone has of bundled up cbs in the channel lineup would be $1. it is not quite as simple as that, because there are a lot of things that go into the bundle that determine it.

Not just a dollar or flat $2. there is a bunch of things that go into that.

One of them is streaming rights in and out of the home.

Time warner cable wants to be able to offer cbs mobile applications.

It is a really good retention tool for them.

Cbs says we will give you that, but you have to pay $2, the high-and price, and if you do not, forget it, no deal.

That is the haggling that is going on right now.

What about jim dolan saying maybe i will forgo tv and the fights i have to go through with the networks anyway?

Let me go straight to broadband.

That is a possibility.

You expect other ceos to talk like that?

They might.

I do not think it will happen anytime soon.

We are already seeing the transition of tv becoming all digital.

As they become smart tvs, the thing your tv box will become more and more of a computer/ television.

It will be internet connected and video will be on the internet.

We will see more and more companies perhaps get into the content business.

As these companies start to offer tv programming, which is significantly less margin than broadband, cable companies can say we will charge them more for broadband come out more for higher margins and let those other companies take video distribution.

Interesting.

It is a shift going on.

At like sherman, bloomberg tv reporter.

From the small screen to the big screen, the latest on another big fight in the media world.

George clooney taking on the dan loeb over creative control at sony.

You are watching "in the loop" live on bloomberg television.

26 minutes after the hour, which means bloomberg television is on the markets.

Futures little changed, indicating the s&p will remain at the near-record high.

Obviously we're all watching the report on services.

This is out at 10:00 eastern time.

One name to watch is qualcomm down after being downgraded at piper jaffray.

We are on the market again in 30 minutes.

That moves us to our bloomberg top headlines.

Tyson foods has been the center of a trade battle between the world's largest economy, the u.s. and china.

They handed the chicken producer a victory by ruling china unfairly taxed imports of u.s. poultry.

China must drop the duties within 60 days or appeal.

The ceo of berkshire hathaway was right again by scooping up stocks and moving away from bonds.

Talking about warren buffett and his portfolio rose 2% in june while other portfolios lost billions.

When the fed signaled it would take for the bond purchase rates spiked.

Bigger is better for starbucks ceo.

Starbucks may double the borrowing to continue the global expansion.

They plan to borrow $750 million in debt while adding higher margin products like lunch to the coffee sellers menu.

Washington meet silicon valley.

Barack obama's administration stepping into the fight between apple and samsung over patents, preventing a ban on the sale of iphones and ipads, older versions of the products.

Peter cook has more.

This is a controversial move by the white house, is stepping in between these companies.

It is controversial.

This will have an impact beyond the 1 dispute.

You have to go all the way back to the reagan years to find the last time an administration vetoed an import ban.

Mike roman did it on saturday.

A big win for apple an ongoing battle for samsung.

They ordered a ban on the import of older model iphones and ipads after finding they infringed on a patent.

Apple argued against it saying it infringed on wireless technology.

Samsung countered the import ban was appropriate because they have not agreed to a licensing deal.

With the clock ticking u.s. trade representative michael bromnfroman stepping in.

He weighed in on the remedy and said a ban was not warranted and the u.s. has wider concerns that this may give patent holders and to leverage in licensing fights.

A spokesperson applauded the decision and said samsung was wrong to abuse the system in this way.

Samsung expressing disappointment over the announcement from the white house.

A spokesperson saying the decision was incorrectly recognized.

And that apple remains unwilling to take a license.

Keeping the iphone 4 and ipad to will help sales in the short- term but over the long-term this bolsters their position in the broader battle with samsung and send a message to others what industry standard patterns.

The obama administration will give competitors a little bit of latitude.

What is next in the fight?

To go the war goes on.

Next up, a decision on whether to ban samsung products because they violated apple patents.

That decision could come as soon as friday and could be delayed further because of the action.

They could continue to pursue this in federal court.

This has no direct bearing on that.

The battle will continue for sure.

Thank you for that.

Peter cook.

Talking about some more fights and disperses that.

Today hollywood's brightest stars lashing out at a heavy hitter.

This the third point capital manager dan loeb.

He has been highly critical lately, pushing for a spinoff of the u.s.-based entertainment assets.

Calling for more accountability for studio executives for failed summer blockbusters like white house down and after birth.

That is actor george clooney who would in interviews said he knows of nothing about the business and is only trying to spread a quite reach a climate of fear.

-- spread a climate of fear.

Last week the c.f.o. called his proposal important and is in mid-way into talks with the hedge fund manager but declined to comment further on timeline for decision.

For more on that story, i want to bring in scarlet fu who has been watching the drama unfold.

Despite his outrage, which was very colorful, sony is actually taking him seriously.

Their deepening the discussions about the proposal.

The idea that they should be responsible for blockbusters that became drags, that does indicate perhaps he is picking on the wrong target.

They certainly have a problem of their own.

No one is taking them to the woodshed for that.

This is more how sony is overall as a company.

The rest of the company's struggling under the weight of the electronics business.

Tell us the relationship between george clooney and sony.

George clooney has a production company that he signed back in 2009. his latest movie, his world war ii movie is co-sponsored by sunday and fox.

They are sharing financing in this case.

They're pursuing franchises and have a built-in audience or recognizable brand.

He is likely to question things like his production deal, vanity deal.

The production companies that actor set up.

Clooney on his own might be vulnerable because he is a big star.

His company has not produced a big hit.

It produced "argo" got a lot of critical acclaim.

He has not been a consistent performer at the box office.

To go somewhat self-serving where he is worried about his own status.

He has a colorful way of putting things.

He sees himself as a leader in hollywood.

Not someone as an actor but as an -- a leader.

The war of words continues.

I love it.

I will keep you posted.

Thank you.

Up next, companies profiting from gloom-free food craze could be left with a bad taste in their mouths.

Fda cracks down on what labels can carry that.

One of the 100 richest people in the world and you do not know him at all.

We will introduce you to a grocer from new hampshire who has been quietly raking in billions of dollars.

? today's bloomberg big number, $332,000. that is how much it costs to reduce a test to burger made from stem cells.

A bunch -- that scientists will unveil the first test tube of burger.

The idea behind this is to create a sustainable alternative to meat production, which contributes 18% of the world's greenhouse gas emissions.

In the meantime, you may want extra ketchup and that burger.

-- on that burger.

The cloak of the gluten-free market may be at risk.

-- the growth of the gluten-free market may be a risk.

Until recently companies and restaurants were on honor system as to what qualified as glued- free.

Olivia's stearns is here to explain.

Why is the fda now waiting in.

I have wondered myself, other products livent-free?

They've been pushing to have the rules set in stone for six years.

What they have done as outlined exactly what the criteria are.

According to the rules coming thick and only have a very trace amount.

Less than 20 milligrams per kilo manufactured.

It will have one year to comply.

The fda says the savings for individuals with celiac disease could reach as much as $110 million.

We know companies like general mills have been rolling out clyburn-free products.

Betty crocker now has 3 million -- 300 products.

Dunkin' donuts offering gluten- free doughnuts and muffins.

I cannot imagine gluten-free doughnuts are much healthier.

There are an estimated 3 million people with celiac disease.

These are the people that really could not eat glutens.

About 1% of the population.

A growing number of americans now consider collude and free a healthier options.

That is what is really driving growth in the market.

The market has basically doubled in the past few years.

Our research group for people without to react disease, there is no scientific proof that it is detrimental to well-being.

Clearly catching on as a fad diet.

Consumers should be wary.

It does not always mean fewer calories.

To tell thank you.

Olivia's turns on gloom-free foods in the market.

In---- olivia stearns.

The ceo of the largest grocery store the liver.

Matt miller joins us with more on pritchardrichard cohen.

He lives in keene, new hampshire.

The 11th richest person in the world.

He runs the largest wholesale grocery distributor.

The move goods and unmarked trucks.

They would prefer to move goods themselves.

You cannot tell.

I guarantee you have driven past one on the highway once or twice before.

22 billion in sales last year.

Very low margin business.

The work really hard at the efficiency and making sure employees fill orders properly.

His clients are supermarket chains around the world.

He takes products from manufacturers.

He moves them to his warehouse and waits for the order from the supermarket and then moves them.

Pretty simple business.

Very low margin.

Efficiency is key.

So you can lose money really fast.

He makes sure his orders are above 90% cover really unheard of in the industry.

Take them he is very gun shy.

Take a lower-profile.

Did not comment for our story.

-- very low profile.

We talk to the ex-president of the company.

They all loved him, said he is great.

Getting feedback from truckers and other people who have mixed reviews.

Like what?

Because some say the truckers do not really care for it.

Others say it is the best clients they have ever had.

The best practice for his company is to make sure he pays employees more when they fill orders on time.

The more orders they fell, the more money they make and they have a disincentive.

If they make a mistake, they get less wages or docked pay.

That is the billionaire best practice.

When you're dealing with slim margins like that.

The difference is efficiency.

Exactly.

Thank you for joining us.

Bloomberg billionaires' index editor.

To read the full story and anything more, go to bloomberg t.com/billionaires.

We will talk to the president of belvidere vodka about how competition is being banned in the u.s. bars and how he might see an increase in sales.

The coolest ways people are using their own body to recreate vehicles.

Really cool.

Stay "in tehhe loop." ? belvedere vodka signed on as the official sponsor the event.

Great to have you.

You are joking about tricking vodka on the golf course.

The two don't necessarily mix.

It is your first foray into this port in general.

Absolutely.

We were looking for a way to target our markets and golf is absolutely one of the events in our target market.

The 19th hole is a particular favor in any golf course.

People get to talk and relax after the game belvedere fits in.

We are the official vodka of pga of america, which allows us to talk to the 20,000 pga professionals of the country.

We are the official sponsors of the pga this weekend.

Belvedere is a global brand and we love to do things that can impact consumers on a global basis.

Lex is as -- it is an alcohol company.

Is it difficult to find areas where he can find sports.

Sports other than you think about budweiser and football.

We always believe in responsible consumption.

That is why golf is a perfect fit for belvidere.

It isn't there were all part.

It is a place where people need to that is why we felt it was a strong fit for the brand.

Russian groups have come out to said they have been opposed to stance on gays and lesbians.

They have now set let banat russian vodka altogether.

I am wondering if that has affected any sales you have seen.

We have not seen as bike in sales as a result of that.

Clearly we sympathize and can understand the strength of feeling within the community about that, but not an issue we have seen a huge increase in sales as a result of.

You have had the company's spokesperson coming out and saying they do not empathize with what is going on in russia.

I wonder as the president of a company like this weather that is a wake-up call to you about how vulnerable your brand can be?

To go all brands in this day and age have to be constantly scanning the external environment to see what is happening and how those events can impact business in france.

Where is the biggest growth right now?

To go up the u.s. remains the largest market.

-- the u.s. remains the largest market.

A huge market in places like brazil as this category expands.

Are there markets you are not in that you will enter in the next 12 months?

We are in 100 companies around the world.

I think we have fantastic global coverage.

We look to consolidate our positions in the markets we're in and continue the extraordinary growth we have had over the past few years.

Ok.

thank you for joining us.

Charles gibbs, president of belvidere vodka.

Staying with sports, a-rod says he is ready to play with the yankees.

Just because his leg injury has recovered does that mean he is welcomed back.

Fiat embraces contortionist in the latest advertisement.

Brings a whole new meaning to you are what you drive.

Details next.

Today at noon eastern, tune into "in the loop" at the half.

Bloomberg radio.

Now boston on bloomberg 1,294.5. fiat has been turning heads with an advertisement campaign featuring a car made out of body-painted contortionist.

Turns out they are not the first to have that idea.

Board has jumped on this and others.

Here is a look of the most eye- tapping examples.

-- i-catching.

That is very, very cool.

56 minutes after the hour, which means bloomberg television is on the market.

Futures little changed as we went for the 10:00 services report.

Data compiled predicts the median forecast for, say services pick up in july.

We are on the market again in 30 minutes.

As you just saw, the young bodies that were contorting themselves into cars may not actually be buying new cars.

We will tell you why the average age of a car buyer is getting older.

You are watching "in the loo ." ? -- "in the loop." . . 30 minutes to the opening bell, this is "in the loop with betty liu." the time warner cable cbs fight looms on.

The blackout is hitting showtime fan's heart.

We are going to have more on that fight in a moment.

More regulations to ban apple products in the u.s. amid patent issues.

President obama has stepped in to make sure that does not happen.

And alex rodriguez has been potential into the yankees lineup site.

But the man on the third base could still come through this morning.

Let us get straight to the markets desk for the downtown blitz -- for the countdown blitz.

I am watching brookshire hathaway rising in the premarket.

Strong sales growth across the businesses.

Shares of berkshire are set to open at an all-time high, five cents up but it's high.

I am watching bonds , a slight move down across the yield curve this morning.

It it is a fact that u.s. treasuries are now the worst- performing sovereign ons.

The economy is getting at least a little bit better.

I am watching viacom, the owner of cable network tv.

The company doubled its buyback program to $20 billion and reported a gain in fiscal third- quarter sales.

Let's turn to the auto world.

An interesting story that has come out.

The group of people most likely to buy a car is now getting older, according to a new study.

The news auto editor has the story.

The reason why this is so interesting is because you keep seeing car companies come out with new models targeted towards generation y, but it is baby boomers buying more cars.

They cannot help themselves.

There is an old saying in the industry that you can sell a old man a young man's car but you cannot sell a young man and old man's car.

A call everything a young person's car and tried to figure they will reach everyone that way.

There are some thinking that that is not the best way to go at it.

So many of the buyers are older and some of the young adults cannot afford to buy a lot of new cars.

What exactly are they buying and who who are the companies that are benefiting from this?

It is all over the map.

This is the car buying generation, this cohort has come through.

They have been consumers of really everything.

Especially cars.

They identify themselves with their cars.

These are the buyers who brought us the minivans, who brought us the suv boom.

Maybe what we seeing is more of the crossover vehicles.

Traditionally the boomers have stayed away from detroit.

There is -- as is the consumer reports generation that got away from detroit.

They went for the more fuel- efficient japanese vehicles.

Ford has emulated a lot of the japanese approach to quality and fuel economy.

There are so many new vehicles that have brought them back to detroit.

That is who is really benefited traditionally.

Does that mean that gm, chrysler, ford, are they going to switch around their ad dollars and what they're spending their money on?

It is tricky.

They are definitely seeking a fresh start with younger buyers.

When those people eventually come around to buying a new vehicle.

It is a real challenge.

They have to look at how they are marketing their vehicles and what they're selling and what they are offering.

There are some efforts.

Toyota, in particular, did one with a did pto into tens a -- did the peak -- did the toyota benzo.

They were showing people at home am a talking about how lame their parents are when it was the parents having a good time and more at peace with who they are.

Maybe detroit will pick up some of those.

Interesting.

Thank you.

More on the auto companies.

Our audit editor in detroit.

It looks like we might finally get a deal for dell.

Michael dell's new and improved offer has gained some traction.

Helping him gain against carl icahn's rival bid, large investors like back rock have now switched their opinion to his side.

-- michael s dell's side.

What did it take to win some of these large investors?

Not much.

And next to $.13 in the dividend.

Those shareholders seem to be cheap dates.

If you add that to the $.10 bump we saw a week ago, that brings it up to $.23 more.

That actually costs blackrock -- with michael dell at this point.

Does that mean the fight is over with carl icahn?

The only remedy he has right now is to go to court.

That is going to be a really high hurdle.

Boards are generally protected under the business judgment rule.

That basically means carl icahn would have to show that the ord acted in bad faith or that it did not represent the interest of shareholders.

A pretty high hurdle there.

One of the remedies that carl icahn is asking for is that the company move up the annual meeting.

We found out last week that the annual meeting was set after the shareholder vote.

The annual meeting is the only time carl icahn had to propose to his slate of directors are you -- of directors.

It will be after the shareholders vote.

Carl icahn wants the meeting and the special votes happen at the same time.

Shareholders will have exclusive -- at this point we might had to see carl icahn increase his offer in order to make sense.

Obviously we had this pump for michael dell and silverlight.

So far it seems that michael dell is in the lead here.

Definitely.

The wind is at his back.

Thank you, cristina.

Cristina alesci, our deals reporter.

Moving and shaking this hour, alex rodriguez.

Though new york yankee fans are baking the flog her to stay off the field he is slated to be in the lineup in today's game against the chicago white sox created before he steps into the dugout, major league baseball is trying to suspend him for his involvement with a miami clinic that sold performance enhancing drugs.

12 other players will accept suspension for the same reason, rodriguez says he will appeal the decision and he will still be able to play during the liberations.

If he cannot play, he will lose up to $34 million in pay.

For more on the story we want to bring in rick horrow, the host of bloomberg's "sportfolio.

The newspapers were all over the story about a-rod.

Tell us how, from a business point of view, how is this going to hurt the a-rod brandt?

The a-rod brandt is already hurt.

We have done the bloomberg businessweek power 100 for the last few years.

He was in our list for years to go at 61. then he went to 87 these last two years.

He is a three-time mbp, 14 all- star games, and he makes a lot of money.

Do not hold a bake sale for him.

His endorsements are drying up and frankly if his rant has any salvation the guy has to figure out how to save some face.

So far he hasn't. at the announcement comes out that he is suspended but he goes on to play, how much worse is that going to be for him?

For major league baseball this is important.

For baseball it is really important.

They are making six or 7 billion -- $6 billion or $7 billion per year.

The average franchise is worth a quarter of a billion dollars.

The commissioner can impose penalties to the game.

It is one of the first things you learn in law school, how strong those powers are.

At the commissioner has to be strong and he has to be consistent.

Everybody is watching this today.

Correct me if i am wrong, isn't the yankees one of the more profitable team?

It is one of the most valuable teams.

The yankees are worth $2.3 billion.

They have a 24% increase in value last year.

That is one million in income.

They're pain a lot of money it to players.

If a rod -- if the yankees do not have to pay the back two thirds of this contract, they may save up to $95 million.

If he is suspended for a year and a half, they may save dirty million dollars.

This is a complicated issue.

Very complicated.

Thank you for joining us via rick horrow on our look at a- rod.

The boston red sox comeback and win two series in the last decade.

He has his eyes on another beantown icon.

The boston globe read the tales on john henry's latest move.

That is next.

Ye of little faith, all those facebook naysayers are eating their words after the company's mobile plan is helping to push shares when all-time high.

Lex the man who brought not one but two world series championships to boston, ending an 86 year drought, is taking a new challenge.

Billionaire sports team owner john henry entered into an agreement over the weekend to buy the open" -- by the "boston globe --buy the "boston globe." to discuss the deal as well as what is like, i want to bring in read phillips reviews the read that he is the ceo and managing partner of investment banks.

He has worked with many deals with "the new york times." john henry is paying less than 10% of the cost of the globe akin 1993. we are talking 20 years ago.

Is this how much the value of newspapers has declined?

It is.

The times bought the global when the market was at an all-time high for newspapers.

Of course they sold when the market was at an all-time low.

At the market seems to be getting worse.

A couple of years ago the times had an offer for the globe that was about $300 million and the buyer assumed the liabilities area did not get through?

It maybe was not ready to sell at that time and maybe they thought the business was worth more.

You were a part of groups that were looking at eyeing "the boston globe." we talked to a group that was interested in buying the globe and they thought they needed additional financing and there might be at rolle for us.

They had enough financing.

Back in february, when the globe with on the market, the price was thought to be $100 million.

How long ago was this yet the six months ago.

Six months ago it was $100 million, now it is $70 million.

What can john henry do that the new york times couldn't? great question.

I think a lot of these local businessmen who are very successful and make a lot of money, if they are civic minded they can buy a sports team, run for political office, or they can buy their local newspaper.

Local newspapers look like a pretty good option, prices are at a low time -- are at an all- time low.

You have a lot of say in the community.

Bucks canon make a lot of money on that?

It is icing on the cake.

If they break even, they are happy.

The objective is to put out a great high quality paper.

From everything i read about what john henry says he plans to do with the paper, i think that is going to be at.

I think anyone who buys a newspaper today has to manage the transition from print to digital.

That is the trickiest part.

That is why valuations are at an all-time low.

Because there are very few doing it well.

That is right.

Is this coin to be a trend we are going to see?

Billionaires and their hometown are going -- billionaires in their hometown are going to start buying their papers back from the become the law mercy echo clocks that is right.

The conglomerates are not buying newspapers.

The media conglomerates are shrieking to their core.

And they are focusing on the businesses that they are really good at.

No one really wants to buy metro newspapers now.

None of the big conglomerates -- they are looking to diversify into other areas.

There was another piece of news over the weekend, "newsweek" is being sold to ip be in -- to ipb.

It was said they didn't realize that the transition would be that difficult.

I think part of the problem was -- what i expected was when they acquired "newsweek," they would put newsweek together with the daily peas and illuminate a lot of the costs that they had.

I don't think they alienated enough of the cost.

I don't think they ran as entrepreneurially as i expected.

Read phillips, the managing partner.

He will be my combat guest to talk about all things media.

That is at 12 noon eastern time.

Coming up, imagine if some of your apple products were not street legal.

It could happen but not of president obama has anything to say about that.

We are going to have more on the import battle.

That is next.

We are about eight minutes away from the opening bell.

From the world headquarters in new york it is time for the countdown blitz.

Olivia sterns is here.

Let us start with toyota.

Toyota's cash while could be a turning point.

Toyota, which has a pile of cash , was told to get this.

About $37 billion is beginning to comply.

And jazz pharmaceuticals may be next.

Analysts tell bloomberg the two former companies are likely takeover targets.

As we have seen before, drugmakers are looking to take it vantage of ireland's 12.5% corporate tax rate.

They are looking to buy companies on the emerald isle.

It is a tough year for the ipad.

It is leading market shares and tablets.

Apple now only has 32% of the global market, down 14% from last year.

Samsung is up 277% as worldwide tablet shipments are up 60% overall.

277%, thank you, olivia.

We are just a few minutes away from the opening bell.

You will not want to miss it right after this break.

It is 26 minutes after the hour, which means bloomberg is on the market.

Olivia sterns has the latest on futures just before the opening bell.

Hi there, as you can see stock futures are little changed this morning.

There pointed to a slightly higher open.

This is after the s&p 500 opened -- s&p 500 closed at a fresh record high.

The big he's data investors are looking for, that is the index number.

It is out by economists.

The number is looking for an expansion and services.

The number is very good news because services account for about 90% of the u.s. economy.

Olivia sterns, our market reporter.

Let us count down to the open with the top 10. these are the only traits you need to know about today.

Economics editor mike mckee joins in as well.

Let us start with number 10, jcpenney.

The retail giant taking a page off of the playbook, hiring the food companies.

This comes for months after jcpenney ousted ron johnson, a former apple executive.

Shares of the retailer are down more than 27% so far.

Not a good year for jcp.

Not a good day for hsbc.

Europe's largest bank is hurting in the premarket after its earnings missed analyst estimates.

Emerging markets are slowing.

Shares are now down over five percent.

Shares of the electric carmaker are trading higher in the premarket as tesla tells engineers that the new model will sell 200,000 cars per year.

That would be not as much as half of the model s. down to 200,000. alaska air, july was a disney -- was a busy month.

Alaska air services 95 cities in north america.

Shares of the airline are up over 46% so far.

Mike e e though gold has commented, these companies stand to profit as the third biggest gold producer.

Angle gold is growing operations in australia.

Gold prices will recover.

Olivia.

At number five, arena mountain coffee analysts are optimistic'sc.

Shares of a copy seller are up 89% so far this year compared to 23% for the s&p. apple and samsung duking it out as number four, the latest victory in the patent war belongs to apple as the u.s. -- the u.s. government removes regulatory trait bans on ipads.

This will handicap samsung's sales as older products benefit from lower prices.

Imagine me and you, i do.

Sirius xm radio, remember the turtles?

The band famous for "happy together" is suing the broadcast for laying their songs without permission.

And that's number two, facebook investors have come around.

Shares are still rising in the premarket.

The mobile ad business is on track to propel sales to more than $16 billion by 2017. shares are finally rosing -- shares finally rose above $38 on friday.

Its highest close since its ipo in may last year.

Time warner cable, theme lead continues.

In an agreement, time warner cable cut of cbs broadcasting in major cities, such as new york and l.a.. subscribers wait for service and investors are waiting on a settlement.

The third day of this band.

Joining us from chicago is the owner of 10 i capital and management.

-- of can i capital and management.

What is the reports as to when we are going to see the fed starts tapering?

I can tell you what my verdict is, it sadly is not going to happen.

It is all talk and conjecture.

It is all if this and that happens.

The jobs number on friday was an absolute disaster.

Those numbers were wretched and horrible.

I want to be very clear about this.

The market is going to view bad news is good news.

Why do you think bonds sprung back up?

The s&p try to sell off and work its way higher.

The fed is not going to change, especially with ben bernanke.

Do you think ben bernanke is going to make some big changes as he is in the twilight of his administration?

It is just not going to happen.

He created the mess that he is not going to be the one responsible for getting the fed out of the mess.

Lex was a do for the markets if they continue?

Doesn't push equity higher?

Does a push down on bonds?

I think it pushes you -- pushes up on bonds and down on yields.

When you have to really worry is when they come out and say come a we are concerned about the jabs numbers and the economic numbers, we are going to increase buying and bonds break.

That is when you have to be concerned.

As long as you get the dismal numbers we had on friday, the that -- the fed is not going to back away.

What they're doing is getting exactly what they want, what is inflation in housing prices.

That is the only thing they're trying to do and it is working.

Tres knippa, the owner of kenai management.

We want to bring in the director of discipline portfolio strategies from wells fargo paid his call, after being bullish on stocks in may, he will now advise investors to pare back on exposure.

Great to have you here.

Great to be here.

Why are you getting nervous in the s&p market?

The fed has done a great job at risk taking, forcing people to seek risk.

But the opportunity we are seeking now is not as attractive as it once was.

We are telling people to take a step back.

If you look at risk assets, if you look at equities versus fixed income and high yield versus investment grade, small council versus large, tremendous outperformance.

How to quickly there is not a lot of room for risk seeking.

We are telling people to take a more balanced approach.

We think the better opportunities are in stock selection and sector selection, not market direction.

Crocs one of the sectors you like is tack.

Olivia has been looking at some of the tech stocks.

As you know, we have seen this incredible rally for equities this year.

Among the benchmarks, it is the nasdaq that has had the biggest bull run the ball.

Some of the biggest names, companies like linkedin, are trading at record high.

That stock has quadrupled since its ipo opened two years ago.

And facebook finally closed above its ipo price of 30 five dollars on friday.

Chris still thinks there is room to run.

She has a good point.

Are the valuations to stretch gap :00 snow, we talk about the general tech markets.

Valuations are generally attractive.

Volatility is coming down.

It makes a really nice risk reward.

It is a contrarian play.

Bigger broader tax base has underperformed the market year to date and longer turned so we think there is a lot of opportunity in that space.

I know you have been traveling along the country.

All of your clients up and telling you the real estate market is coming back.

I know you're watching the real estate market, mike.

The market is coming back but it is interesting, things you can invest in are not coming back.

Look at the s&p 15, homebuilders index, it is down one percent on the year.

You can see volatility over a longer.

Of time, they are not gaining anything.

Can you invest in this real estate price boom we are seeing?

If you look at the homebuilders, they have had a tremendous run over the last couple of years and now they are starting to pull back.

They're right -- they're reacting to higher interest rates.

We travel to the midwest and west coast, we are seeing identification pin -- eight gentrification.

We are seeing a lot of developments down there.

With regard to homebuilders, i cannot say yes or no.

We still think housing has a lot of room to run.

Where would you go, then?

You are talking about developers who say things are doing well.

Would you invest in buildings and apartments?

Reits have had a tremendous pull back.

They could pull back a little bit more.

We would just be more selective in the housing market.

There is no one particular subsector that stands out to us.

Great to have you here on the call for us.

Coming up, one outcry of twitter users has the site crashed down on rules to prevent online abuse.

Fast food workers protest over their pay and to linkedin asks what is really wrong with america's business pit it is one of the most talked about stories.

We are a few minutes into the session.

You're a look that here's a look at the top tech stories.

We may finally get a deal for dell.

Newest opportunity did pc maker private is gaining traction.

-- the newest opportunity to take the pc maker private is gaining traction.

Of all companies with a pr problem, twitter has a big one.

Uk general manager tony wang has apologized to women who were harassed on the micro-messaging website.

Complaints about violent threats toward high-profile female unit or -- high-profile female users . marbles comic book heroes will fuel a new television season in september.

The creator of the vendors will air "agent shield." catch all the latest in tech and media every day at one and 6 p.m. eastern time only on bloomberg west.

Time for a weekly look at linkedin's top headlines.

Joining me is the social network's editor.

Everybody has been reading this tweet that has been passed around, talking about what is wrong with american business.

Tell us more about this.

A story was written saying that american business needs to start putting money back into american employees.

Someone tweeted him and said that you are totally wrong.

American workers are trading their labor for pay.

They get whatever they deserve.

That is the exact tweet.

They don't have a stake, they hold nothing, they trade their labor for money.

Exactly.

What rogers is saying is absolutely wrong.

Your employees are assets, you have to manage them, they are not cost.

The problem with american business is we only think about short term profits.

If you think about the long-term and employees as being something you invest in rather than take money out of, it changes the way you do business and changes the way american companies pay their employees and it changes how much people have in their pockets at the end of the day.

That rose to your number one story.

Absolutely.

The comments clearly showed that not everyone agreed with the reason why it was so past run is because not everyone can only thought.

Some other stories that got a lot of attention.

Adam grant has now become very well known since the new york times magazine piece.

What millennial's really want out of work, -- we have heard millennial's being narcissistic, asking for things that will be happy at work.

They want to be treated like beautiful creatures and they are all special.

Adam says this whole stare at is exactly why it is a stereotype.

When you look at millennial's, the issue is they were young.

We were all young once.

We were all called spoiled brats.

It turns out we are the baby boomers.

Basically if you treat people the way they want to be treated, make sure they are being rewarded and like what they are doing, they're going to be happy in their job and absolutely.

"why i believe energy can -- she could have been written about anything.

She chose to write about the power of human energy.

She travels the world, she talks to employees constantly.

They come from 40 different countries, 70% are under the age of 30. the only way she can get them to do what she wants them to do is to deliver her message with such energy that when they walk into the room they are -- she has to be energized.

Exactly.

Lex great to have you with us.

Thank you for joining us.

Dan roth, the executive editor at linkedin.

Can history repeat itself?

Ben bernanke's plan to reduce stimulus by buying japanese stocks.

The biggest rally in three decades.

Time now for the global outlook.

If history is any guide the fed's plan to reduce stimulus is just what japanese stocks need to revise their biggest rally in three decades.

Mike mckee joins us with more on this.

If the japanese make money, can they think ben bernanke?

It is always the search for yield.

If people are not getting it here, they are going elsewhere.

If they are not -- it really depends on whether or not the fed is going to keep stimulating the stock market.

They're not going to taper.

That is what everybody is watching.

And you are looking at some place else to put your money.

The japanese are stimulating the economy much more than we are.

At this point, they're market is going up, even though their yields are down a little bit because they're betting on more growth.

What you are saying is that to continue with this monetary policy, eventually that search for yield may drive people into the low yield environment of the japanese?

Clocks that is the theory at this point.

But not necessarily the bond market in japan.

The yield their are so low.

What you are looking is at the stock market, which is increasing.

They have boosted stocks over in japan.

It has been rocky but they have boosted them because at this point they feel the economy could pick up and inflation is going to contribute to those gains.

The combination is going to make it worthwhile to put money there.

All indications are that japan is going to stay with easing monetary policy.

That is the government's old.

The markets also say that if they do not start to show some evidence of inflation in the economy and growth in the economy after about a year, then they might give up on them.

So far they are seeing that.

There is still hope for japan.

That is why you see the reaction not only in the equity markets him up at the year and see markets -- but the currency market.

There are come pushing something.

When you talk to the portfolio managers about japan they say you had to be careful in your timing.

Thank you.

Mike mckee, our economics editor on japan.

There's a lot happening in today's session.

What to watch for today's triple play.

One of the academic -- one economic data that is coming out at 10 a.m. -- one key data that people are looking at is siism.

People are expecting an increase of 52 by the june readings.

That is particularly good news because services compose about 90% of the u.s. economy.

And also on your radar -- the headline is "let them eat cake.

The story is that lvmh is entering the hospitality market.

Don't forget, earlier this summer he also talked up the kashmir maker for 2.6 billion dollars.

I know he is on a spending spree the summer.

They are all becoming lifestyle brands.

That would make sense.

A-rod is in all of our radars.

And will he or won't he play.

That is the question of the day.

Obviously alex rodriguez is the starburst made -- the star third baseman of the new york yankees.

A lot of fans do want them to walk away.

It depends on how he is suspended.

If you suspended for using drugs he can appeal.

And then he can play tonight.

If you suspended under what is called the best interest of baseball clause, then he cannot appeal.

He would appeal to the commissioner and obviously the commissioner -- it is not going to help them a whole lot.

Everyone is waiting to see how this comes down.

A lot of players are going to be suspended two.

It is going to have a lot of impact on those teams.

A lot of stories on brian ron and what that has been the finances of the milwaukee brewers -- is done to the finances of the milwaukee brewers.

I'm sure the chicago white sox will be playing and not too disappointed.

Are you a yankees fan?

Unfortunately i am a mets fan.

Long-suffering.

We have had our own problems.

Thank you.

Mike mckee and olivia sterns.

It is not noise, it is news.

"in the loop" back in two.

We are on the markets next.

That does it for today on "in the loop." tomorrow, what is free-market capitalists think of the ben bernanke -- edward conard will be in to weigh in on that.

It is 56 minutes after the hour, which means bloomberg television is on the markets.

Olivia sterns joins us with more.

Hello there.

Let us take a look at how markets are trading right now.

You can see markets are edging a little bit lower this morning.

This is after the s&p closed at a record about 1700 last friday.

The s&p is down by 2/10 of a percent.

The dow jones is trading just below 15 600. some names to keep your eye on, facebook is trading above its $38 ipo price, at last.

The price target was raised from $46 to $48. green mountain coffee, lower mountain coffee costs are expecting share prices stifling.

It is down now by one percent.

It is also time for futures in focus for the month of august.

The markets are on historically active.

To that we a lot of traders are out.

We always say lower volatility.

Talking about how to play it is gareth bryant, he is a strategist and managing director at i you are capital -- at iur capital.

How are you playing at?

Clocks will he take a look at what is happening over the last few weeks we see that nice recovery from the selloff the at -- from the selloff.

July was good for our clients.

The s&p had a nice month, setting a five percent higher.

He did not see that being repeated in august.

We are looking for volatility to be quite low throughout this month's. a lot of people are away from their desks.

We should see it pick up again in volatility and broader moves in the markets during september.

Do you think lower volatility in the markets is perhaps a sign of safety?

Do you think we will continue seeing equity markets rise?

When you

This text has been automatically generated. It may not be 100% accurate.

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